Money is Moving -- These Stocks Could BE NEXT!!

Core PCE rose.2 for the month which was below expectations and as a result we had an incredible trade session this morning in the stocks with Josh community because stocks jumped as traders dialed back the expectation of another rate hike. Now the question is is October becoming a pause story? This could give tech stocks room to run. But the next major trigger to confirm that is going to be September's job report Friday, October 2nd, 2026 at 8:30 a.m. Softer hiring supports a pause. But if we saw a collapse in jobs, that would turn relief into recession fears, and we would begin to plummet. And then comes September's CPI. That'll be the next big gauge that we're going to get mid October around the 14th at 8:30 a.m. Eastern time. And what we're looking for there is that cool inflation will continue to fuel the rally that we're in. And a hot read could threaten to reverse it. You want to circle those two warnings because those are the next two biggest catalysts the markets are going to be moving towards to get its next big direction from. That's when the rate hike trade gets tested. Welcome to Wall Street. This is the Stocks with Josh show. Thank you for joining me today. Now, in recent days, I've talked about some big tech stocks, and I'm going to take a pause because I want to go and talk to you guys about the value trade of some good blue chip stocks that are sitting down on their lows. I want to prepare you that if we do begin to see a reversal in growth and a fear of rate hikes, then we're going to begin to see money not move out of the market, but move into the value trade because a lot of those are sitting extremely far down on their lows right now. So, I'm going to cover two big tech stocks in the coming days that I want to be in at the end of October for a rally into 2027. But today, I'm going to talk to you guys about rotation from growth into value. Now, this is not a swing trade. I'm going to be calling this my blue chip rotation watch list, and it's going to cover names like Costco, Pepsi, Coca-Cola, McDonald's, Proctor Gamble, Ticker CL, Colgate, Palm Olive, and SO and energy company. Now, today we're going to highlight a stock that's 30% down from its all-time highs and dropping again today. Now, this represents a $100 loss per share, and it's been dropping for seven straight months. This for some has been a pain trade, but for me, it's an exciting opportunity because I'm getting into it. Uh, not panic selling at this point. Now, it's miles under its 200 day SMA on the weekly time frame, not the daily time frame, which means that there have been some stacked red candles. And what we're going to try to figure out today is why has it been dropping? When will it reverse? What is critical support and why? And overall, is it a good investment? And is it at a good valuation that Wall Street might begin to reverse and buy this up? We are talking today about Mickey D's, ticker MCD, McDonald's. Now, before I get into the stocks, I want to talk about the overall market and I want to take a minute and look at the spy with you. So, let's go check out that chart. All right. As I said in my opening on October 2nd, we're going to get the jobs report and we need to watch this 764 level carefully. If we lose that level, we'll also be losing the 9 EMA on the weekly time frame. And the 9 EMA on any time frame shows a persistent trend. And you can see that we have been bouncing on the 9 EMA all of 2026. And so the trend is clearly established in the hands of the bulls. But if we get a bad jobs report and we lose 764, then you need to understand that the up move is currently off the table and we're going to have to watch some of these lower targets. One, our ascending line of support and then again the previous area of support at 750. Now, if that jobs report comes in, sort of like the PCE, better than expected, then we could starting next week, make that push up to 783. It'll still be at that point 100% on the table. So, watch October 2nd to see what the next move on Wall Street's going to be. I want to throw in a little commentary here on the RSI. I want to remind you guys in my last video that I talked with you about how momentum has been getting pushed down. Uh, and we are in that same boat right now. we are getting pushed down and if we lose this 60% level I would expect a very large 8% correction on the spy. Now I'm not predicting that. I'm just telling you that it's on watch. So keep an eye on it. That's going to be our number one signal for the market rolling over especially as we get into the month of October which I believe would be the last opportunity the market would have for pricing in midterm volatility. Okay, let's jump into the subject matter of the day which is why is McDonald's falling? And there's three reasons that you need to understand about McDonald's stock right now. And the first is that it's not considered a cheap meal anymore. That's how tough inflation is. Even though the PCE came in soft, everyday Americans going to and from work and uh shopping and everything else they're doing used to buy a meal at McDonald's in a hurry. That's too expensive for them. They've been priced out and that's weakened McDonald's appeal to the general public. And so far, their efforts to win back the masses has proven to be more difficult. And it appears that some of that business is being driven over to Taco Bell with their $5 meal deal has actually won a lot of that business. And it was interesting to me when you consider that Taco Bell had that um diarrhea scare earlier this year with the lettuce and that still wasn't enough to drive people back to McDonald's. People need a cheaper meal. So listen, this economy can't be that good if Americans have been priced out of McDonald's. That's point number one. Point number two is it's already been reflected in weak growth. Sales grew just8% in the second quarter, which isn't that bad. Uh it's better than sales declining, but sales have stopped growing considerably, and that was definitely reason enough for profit taking and a potential test of the lows before getting back in. Management also didn't help when they warned that the tough conditions would likely persist, giving lower investor expectations. And then the third reason that McDonald's stock is on the floor right now is that they believe that they've got to go into debt to fix the problem. Wall Street loves profits and hates debt. And it's going to cost McDonald's $ 8.5 billion in franchise support through 2036 to fix the business. And so that means it's a much bigger problem lasting much longer and isn't going to be fixed overnight, which means they really don't know how to pull those customers back in without cutting costs and further cutting profits, which is another thing that investors don't like and aren't happy about. And this is why we've seen share price plummeting. Now, what I like to do is I like to go back into time and look in their history. Have they faced problems like this before? How did they deal with it? How low did the stock go? What can we learn from the past? And there are at least three examples that do tell a story that we should be paying attention to. One of them was back in 2002 2003. Now this was a much deeper crisis and it was in the aftermath of a much larger downturn after the dot uh bubble had popped and the economy was in trouble and at that time the stock price went down 60% and it largely pushed down for 3 to four months. Now, I'm going to compare uh that time frame with how long we've been going down now uh to get a perspective of have we hit the bottom. Uh but remember that pull back in 2002 2003 was still considered part of the dot crash. The next one was in 2014 to 2015 and that's simply because customers lost interest and at that time sales fell for seven consecutive quarters and it wasn't until they started All Day Breakfast that it picked up back again. Now, that downturn, believe it or not, wasn't that deep. It was only a 16% downturn. And then the one that I think is very similar to what we're dealing with now, and that is the downturn in 2024, which was the early tremors telling us that we were going to have a rough time in 2026. And that was the affordability problem that inflation was bringing to the doorstep of McDonald's. And they dealt with it by introducing the $5 meal deal. But people still aren't finding the value in McDonald's. and in that meal deal and they simply have not been able to bring back that lower income customer. Now in 2024 the stock fell 19% and it took 6 months for it to reverse. As I mentioned at the opening we are down 30% and it's been going on for 7 months and so I do believe that we're getting close to a potential reversal. Now, other notable pullbacks were the 2020 crash, which went down 44%, but we'll chalk that up to COVID, and there was the 1987 market crash where McDonald's went down 40%. Now, we are much closer to these larger extreme pullbacks, which is another reason why I believe that we want to be looking at long-term investing in McDonald's because it's gotten pretty cheap and I don't think it's going anywhere. So, let me just make a couple technical points about the stock right now and then I'm going to take you into the chart and then I'm going to give you some important things. We're going to talk about dividends and triggers for the up move and how we know that it's actually had a true reversal. But I wanted you guys to understand that since 2005, McDonald's has lived above the 200 SMA. And why is that important? Well, some of our favorite big tech companies cannot boast such strength. McDonald's has spent 98% of its time over the last two decades climbing and living above its 200 SMA. That is 22 years of success. Okay? And it has only had 16 weeks in which it had closed below the 200 SMA. Right now on the weekly time frame, it is beneath the 200E SMA and part of that 16 weeks are that it's been under it at this most recent time. So, if this is the low and we get a reversal all the way back up to the top, which I believe that McDonald's will do, that would be a 46.3% rise. And as I said, McDonald's does pay a dividend, which is nice. Uh, this stock has the potential to move 50% in the next year. I believe that opportunity is on the table right now. I want to highlight the RSI, which is the key to gauging a potential reversal. and I'm going to show you where it's lining up right now. And that's probably my number one reason for looking at taking risk on McDonald's. Let's go look at that chart. Okay. Truly, this is a beautiful chart. Simply climbing and making its shareholders richer and richer every decade. But we're in a downturn, which for all of us who want to get into McDonald's for the long term are potentially seeing as an opportunity. Now, that red line that you see running through the chart, that is the 200 SMA on the weekly time frame. And you can see that whenever it's come back and hit that level, it's been an absolutely great opportunity to buy except for this most recent time where it had an additional leg down. Now, when I look at something like this, I would say that this is a multi-deade strong chart moving higher, and I don't see McDonald's as a corporation going anywhere. And so, I do see this reclaiming this ascending channel and continuing its march higher for the next decade. But we want to look carefully at when is the best opportunity to buy. Now, the only reason why I want to highlight the MACD is that even greater than the 2020 decline, we've had a much stronger push down on the MACD. So, this is a historic sell-off for McDonald's that really isn't backed by any significant problem. They don't even have negative sales. They just have slowed growth. Now, it could be that when they do get their earnings and if the sales did turn negative, then we're going to see a volatile moment, another small dip, but that is going to mark the potential reversal. Let's dial in on a monthly chart and look at the RSI because that's what we need to be looking at right now. I love to buy great companies when they're going through severe downturns. And you begin to look at this chart and this type of move down is extremely extremely rare, which means it could be setting up for an extreme opportunity. If next month we reverse and get back above this 40% line on the monthly chart, this is going to be a once in a decade opportunity to buy McDonald's. Now, I want to zoom in and show you guys some patterns in the candles. Something that I look at is how long does a stock pull back before reversal. And sometimes you'll see that there'll be some green candles in it. But from when we got this first red monthly candle, there was 1 2 3 4 5 6 seven candles before the bottom was hit. Okay? So, let's keep a note of that. And then over here we have the first red candle here. 1 2 3 4 5 6 7. This wasn't as much of a downturn. Okay, this was the downturn I talked about that occurred in 2024. But the final candle before it went green again was on the seventh month. I think you can see where I'm going here. 1 2 3 4 5 6 7. So we have another seven months. And I believe in this rare circumstance of being so oversold on the RSI and so low overall based on uh the fact that the fundamentals really aren't that bad. And I don't believe that when we actually potentially get bad news that that is going to be an additional leg down that McDonald's is going to have to go. I believe that's going to mark the bottom. So be prepared. I'm going to try to go through these value stocks that I believe that if the growth story begins to slow down and pull back, that's where these are going to begin to get green candles. So, let me know what you think in the comments section. Are you interested in McDonald's at these levels? I personally believe that this is a long-term investment stock and I think it's looking pretty attractive. So, let me comment on the dividend. They pay basically $1.93, $2 per share each quarter, which works out to around eight bucks or $7.72 annually for each share that you hold. It's a nice little additional perk. That's approximately an additional gain of 3.3% annually. And if we get all the way back to the top, that's around a 46% move. You put those two numbers together and you put a $100,000 investment into McDonald's, you could have in 12 months $150,000 with a relatively conservative company that you may not be too afraid to hold long term. It's been a winner and as Wall Street loves to reward the trend, the trend is clearly higher decade after decade. W McDonald's doesn't appear to be going anywhere. And then we've got the catalyst. What is the next biggest catalyst? Well, 36 days from now on November 4th is going to be their earnings. And I believe that as we get closer to that, we're going to see the stock price stabilize as people maybe the bears are going to feel like it's time for them to get out of that bearish position and protect themselves against a good earnings event which could drive the stock higher. So, that's another thing that I often look for is we're going to be looking the stock has been strongly in decline. Well, we're going to look for it to stabilize and pull up a little bit, and that could present us an opportunity today. So, the triggers for this to really begin to prove that it's in a full-blown reversal and that the bulls have wrestled away from the bears is a price move above $260. And today, it's sitting at $233. So, between now and earnings, that is the range in which I'm expecting it to potentially consolidate. Now, even if we were to get up to $260 and close above that, that would be great. But the overall long-term trend is not fully reversed until we get above the 382 and.5 fib levels, which are between 275 and $288. When we get above those levels, we know that we're going higher. And that level on the weekly time frame takes us all the way up to the 200 week SMA which is a very important structural level that at bare minimum we would back test before going lower. So that is the number one reason why I'm bringing this stock to your attention is I believe that we can get in at 233 and we're likely to go to 280 at a minimum even if the story behind McDonald's remains bearish and the macro is not good. That is a likely back test area after a sevenmonth pullback. So the bottom line is that if growth stocks lose momentum, the question is where does the money go next? My rotation watch list, it starts with Coca-Cola, Pepsi, Proctor Gamble, Walmart, Costco, and McDonald's. And this is the first value stock, blue chip value stock that I'm going to be covering in that watch list. And I would love for you guys to make your own watch list and keep an eye on this group of stocks because I think there's going to be winners in this mix. But the reason for the sell-off, it does matter. McDonald's is a quality play, but valuation is key. And those are the important triggers that I'm watching. And I can tell you, I am going to be a McDonald's buyer. And I like it now. I'm just not going to buy my entire position. I'm going to move into it gradually. And if tech begins to lose steam, and I don't think it's going to lose steam permanently. I think that big tech is going to do extremely well in 2027. But I do believe that we are going to see the bottom of these value plays and we're going to see them begin to move back up, especially if big tech gets into some trouble in the month of of October. But I gave you guys what's going to be the trigger for that type of situation. Let me know what you think of these plays and let me know if there's a blue chip rotation stock on your watch list that's not on mine. Peace and blessings, my friends. Don't sleep on the Stocks with Josh Discord. We killed it today in live trading and I hope to do it again Friday. Get in there and trade with me Friday. Peace and blessings. I'll talk to you soon. >> If you're not in the Discord, you're missing out on some of our biggest live trades. >> We're starting to rip now. 30% on Nvidia. 45. We'll move from the 220 41 all the way up to the 22151. 89% 62%. It's a runaway train, man. What a ripper. 86 87 650 buck profit on that. Climbing 92% 87% on Nvidia. Like this. to get half at 45% the other half at 90%. [music] 97% on Nvidia. Got 113%. That [music] my friend is not a boom. That is a kaboom. That's a shaka boom if you ask me. Got 135% on Meta. Got 200% on Nvidia, 251% on Nvidia. I was driving LOL. Not the safest trade I ever took, but she made some money. Taking my $3,54 for the day and running. Thanks for the great session. Join our Discord with 11 live trading sessions every week. 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